Question

2018 2019 Assets Current assets Cash $ 5,298 $ 5,827 Accounts receivable 7,707 9.477 Inventory 12.150 22,956 2018 2019 Liabilities and Owners' Equity Current liabilities Accounts payable $ 3,754 $ 5.986 Notes payable 2,045 3,055 Other 152 179 Total $ 5,951 $ 9,220 Total $ 25,155 $38,260 $ 22,700 $ 19.000 Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings $ 43.000 $ 43,000 28,805 47189 Fixed assets Net plant and equipment $ 75,301 $ 80,149 Total $ 71,805 $ 90,189 Total assets $100,456 $118,409 Total liabilities and owners' equity $100,456 $ 118,409 MATHISON, INC. 2019 Income Statement Sales $ 249,854 Cost of goods 204,317 sold Depreciation 8,730 $ EBIT Interest paid 36,807 2.811 $ Taxable income Taxes 33,996 7139 Net income $ 26,857 Dividends Retained earnings 8,473 18,384

Answer 1

Profit margin Total assets turnover Equity multiplier Return on equity 10.75% % 3.21 times 0.96 times 33.16% % ROE Net Income Average Equity 26,857.00 $80,997.0 33.16% ROE = Net Profit Margin X Total Assets turnover X Equity Multiplier ROE calculation component wise Net Profit Margin Total Assets turnover Equity Multiplier Net Income Net sales Total Average Assets Sales Average total Assets Total Average Equity ROE ROE Net Profit Margin Total Assets turnover 10.75% 3.21 $26,857 $249,854 $249,854 $77,725 Equity Multiplier 0.96 $77,725 $80,997 Calculation Working notes: Average Assets Beginning balance Closing balance Average Assets $75,301 $80,149 $77,725 Average Equity Beginning balance Closing balance Average Equity $71,805 $90,189 $80,997